California Mines Are Reopening: Could There be Another Gold Rush?

by Jennifer Shea
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In California and elsewhere, long-abandoned gold mines are reopening after gold became a more lucrative business investment amid record-low interest rates that cut the return on bonds and savings accounts. But gold mining is not without its share of risks. Particularly environmental ones.

In one Northern California town, Grass Valley, the Rise Gold mining corporation plans to reopen a mine that shut down in 1956. Its project has pitted conservationists and economists against gold mining executives, The Atlantic reports.

The gold that’s left in the ground – approximately 63,000 tons – is deeper down than the 206,000 tons that miners have already dug up. And the pursuit of it promises to create a massive amount of mining waste.

Still, there’s money in it for the corporation. Gold prices have climbed in tandem with the economic uncertainty brought on by the pandemic. And advances in mining technology are changing the calculus for companies who once considered mines in places like Grass Valley impractical.

Mines Raise Concerns from Conservationists, Economists

Rise Gold has a plan to deal with the huge amount of mining waste its project is likely to yield. It’s a process known as “paste backfilling.” To accomplish it, the company squirts a mixture of water, mine waste, and cement into mining tunnels.

But conservationists point out that mining leaves behind a lot of waste rock and tailings. And Rise Gold will need to transport the 182,500 tons of byproduct leftover from its planned operations, then convert it to engineered fill. One dump truck carries only about 14 tons. So that’s a lot of dump trucks.

Moreover, underground mining operations cross paths with the water table. So the pre-existing tunnels have to be dewatered. And the water from the mines they’re dewatering is full of heavy metals. So they’ll need to treat the water for a long time before releasing it aboveground. Rise Gold wants to dump the water in a nearby creek. But that risks harming local wildlife.

Plus, economists say gold mining entails a lot of expense for relatively little profit. Especially as companies go after gold that’s buried deeper underground. Financial economist Dirk Baur and his colleagues have even suggested that investors buy shares of gold that mining companies pledge to leave in the ground. In a 2021 paper, they called this “green gold.” Investors buy stock in gold exploration companies that have found gold, but promise not to mine it.

Gold mining companies “hate the idea, of course,” Baur told The Atlantic. But investors can face negative consequences from the environmental disasters that sometimes accompany gold mining. And for them, it may be worth considering.

Rise Gold’s Hydrology Report Concedes Some Arsenic Leaching from Test Samples

Rise Gold has sworn that its mining operations will be environmentally friendly. But a hydrology report from the company does document some arsenic leaching from test samples.

The test samples exist to demonstrate what will happen to piles of waste rock when it rains. And the arsenic leaching they revealed (from the mineral type serpentinite) was 17 times more concentrated than water-quality standards limits.

Some locals are staunchly opposed to the project. And the costs of digging up gold 3,000 feet below the surface run into the millions. So Rise Gold’s gambit looks like a bit of a long shot. But time will tell if gold prices continue to make the benefits outweigh the costs for the corporation.

Outsider.com